Uber Challenged by 13 Active Lawsuits and 11 Angry Regulators

Skift Take

Uber needs to find a way to quickly make peace with regulators before they get disrupted by a cool and legitimate cab company with a fancy smartphone app.

— Jason Clampet

If cab companies and state officials get their way, they’ll regulate ride-sharing service Uber to death.

Ambitious transportation startup Uber now faces at least 13 active lawsuits in the U.S. and is under fire from 11 state insurance agencies over its insurance practices.

You’d think the firm would be busily working the phones for damage control, but it’s not — Uber’s spokesperson and head of corporate communications, Andrew Noyes, has left the company. The former Facebook public policy manager originally joined Uber less than 12 months ago.

Since Noyes’ unexplained departure, Uber has nearly gone dark; only the unresponsive company’s expansion plans are clear. Not long after it announced its 100-city milestone, VentureBeat discovered a series of job listing revealing Uber’s next batch of cities. Future offerings, including the Family service, reflect Uber’s continued plans to disrupt the traditional ground transportation industry.

And disrupted they are.

Uber Vs. Taxi Lobby

State insurance agency officials from 11 states — including California, Ohio, Nebraska and Minnesota — are lining up to condemn Uber for its insurance “coverage gaps.” While the states in question have issued statements of their own, one organization is drastically amplifying the message: the “Taxicab, Limousine & Paratransit Association,” a non-profit organization that claims to be made up of “1,100 regulated transportation companies.” (Note the use of the term “regulated.”)

For colorful commentary, we called Dave Sutton, the spokesperson for the Taxicab, Limousine & Paratransit Association’s “Who’s Driving You?” initiative. According to Sutton (emphasis: VentureBeat):

We’ve been warning about the risks, and now you have insurance experts in all these different states warning people. Insurance is very simple. Private drivers will not be covered by their insurance. …The ridesharing companies have said “well, our policies are supplementary,” but insurance experts are saying that this is not acceptable. The only way to provide coverage for driving commercially is commercial coverage.

Our members have a financial interest in this — yes they do. But what we are talking about is public safety.

In the limited cases where Uber responded to our numerous requests for comment, the company called the Taxicab, Limousine & Paratransit Association’s campaign “a scare tactic.” (emphasis: VentureBeat)

The ‘Who’s Driving You?’ campaign is nothing more than the taxi lobby trying to protect an antiquated industry from competition and consumer choice.

Uber complies with all laws and regulations applicable to its business. Any claim to the contrary is baseless and motivated by those who seek to deprive the public of this safe and convenient transportation option. Uber would rather compete for business on the streets of San Francisco than in the courtroom, but Uber will defend these claims in court and is confident of the outcome.

That 2012 lawsuit was eventually dropped. But for Uber, it was only the tip of the iceberg.

The Lawsuits: Regulation, Insurance and Death

While Uber now battles two insurance-related lawsuits, the company is under attack from drivers for allegedly withholding tips and for allegedly sidestepping industry regulations. On the most extreme end of the spectrum, Uber is wrestling a wrongful death lawsuit after a purported Uber driver struck and killed a six-year-old girl this past New Year’s Eve.

According to Uber communications team member Lane Kasselman, these lawsuits are largely frivolous:

Despite often frivolous lawsuits filed by anti-competition taxi interests, the critical fact is that in no us [sic] city has a court decided that Uber can’t operate.

Yet Uber drivers are reportedly facing fines from legal authorities in New York and Tampa Bay, Fla. Given the century-old, highly regulated industry in which Uber operates, these roadblocks are unsurprising. However, the company’s aggressive growth has shifted the narrative.

What we have now is a pile-on. At best it will disincentivise Uber to innovate and bog it down for years in legal limbo. At worst, it will kill off Uber and suffocate its competitors along with it, including Lyft and Sidecar.

According to Silicon Valley legend Marc Andreessen, Uber’s software “eats taxis.” But for Uber chief Travis Kalanick, these conflicts are just par for the course.

This is what happens when you destroy an antiquated system. Unless that system destroys you first.

Updated May 8 1:20 ET to reflect the total number of state insurance agency warnings.